Unit 1 Summary

Michigan License Law

Real estate license law is designed to protect the general public and requires potential licensees to:

• Possess real estate knowledge and skill.

• Have a reputation for honest and fair dealing.
• Display ethical conduct.

The Occupational Code authorizes the Department of Licensing and Regulatory Affairs to administer this law.
• Article 25 created the Michigan Board of Real Estate Brokers and Salespersons to regulate real estate
brokers and salespersons.

The Occupational Code is the law drafted by the Michigan State legislature. The Administrative Rules are the
Department’s policies as to how the Code is interpreted and enforced.

The Department consists of a director as its executive head and other officers and employees appointed or
employed by the department.

• Issuing and renewing licenses.

• Administering and monitoring exams.
• Conducting investigations.

The Board’s duties include:

• Establishing and enforcing rules for licensees.

• Interpreting license requirements.
• Aiding in investigations.

The Board consists of nine voting members.

• Six (6) members must be real estate licensees.

• Three (3) members must be from the general public.
• Each member must be at least 18 years old.
• Each member must be a resident of Michigan.

Members are appointed by the governor with the advice and consent of the Senate.

• Terms are four years in length.

• Members cannot serve more than two consecutive terms.
• The governor has the right to remove a member of the Board.

The legislature determines the per diem compensation for a member of the board on an annual basis.

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 Unit 1 Summary
Michigan License Law

The Board must meet at least twice a year.

• A majority of the members appointed and serving constitutes a quorum.

• A member of a board cannot vote by proxy.
• The files of the board must be available to the public.

Principal vocation is defined as:

• Engaging in more than 5 real estate sales in any 12-month period.

• Holding oneself out to the public as being principally engaged in the sale of real estate.
• Devoting over 50% of one’s working time or more than 15 hours per week in any 6-month period to the sale
of real estate.

The following do not need to have a real estate license.

• Michigan-licensed builders who sell what they have built.

• Owner or lessor selling or leasing own property.
• Attorneys-in-fact acting under a legal power of attorney.
• An auctioneer who auctions real property to determine its price.

Unlicensed assistants may not:

• Independently show or demonstrate property to prospective buyers.

• Make cold calls to potential listers, purchasers, tenants or landlords.
• Answer any questions on title insurance, financing or closings.
• Solicit business through telephone prospecting.

Unlicensed assistants may:

• Accompany licensees during the holding of an open house and perform the following functions as a "host"
or "hostess."
• Perform strictly clerical tasks.
• Function as a courier in picking up or delivering documents on behalf of the employing licensee.